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September 20, 2005

There's a right kerfuffle over convergence between IFRS and UK accounting standards according to Accounting & Finance365. I am so not surprised.

When Tweedie was running the IFRS show, he failed to understand that accounting software needed to accommodate the new regime. He didn't realise the implications for software developers and many were caught with their proverbial pants down back in 2003-4. It was a nightmare. I remember because I was part of that debate, especially in relation to IAS39 - the most stupid idea I've seen in ages coming from a regulatory body.

Now we have the situation where the ACA is saying 'hang fire' but the ACCA is saying 'keep going.' Smaller practitioners may be tempted to shrug and await the outcome. This is a bad idea, especially given the SMB regime has not been fully formed and may contain unpleasant surprises.

I'd recommend keeping a watchful eye on this one - it will almost certainly impact your accounts prep software - and that means more learning. If you think there could be issues with affected client groups then communicating now will save pain in 2006-7.

September 14, 2005

The International Accounting Standards Board has received over 100 letters of comment in response to its consultation on the requirements of standards for small and medium-sized entities.

The application of the proposed SME standards will be much wider than the existing UK FRSSE. Under current proposals, any entity will be able to use the SME standard, other than those that are publicly listed or otherwise publicly accountable.

It is understood that the majority of commentators favoured the development of SME standards from full IFRS, as opposed to the 'clean slate approach'.

The IFRS framework is already causing problems for many practitioners, especially those engaged in undertaking conversion work. I'm surprised so few letters were received. Given the weight of compliance legislation, its impact on clients and fees, I would have thought practitioners would be beating down the Institute's door. Or maybe we're all so pissed off, we've no energy left with which to argue against the latest proposed changes.

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